ENERGY SAVINGS THROUGH INCREASED FUEL ECONOMY 

FOR HEAVY-DUTY TRUCKS 

PREPARED FOR THE NATIONAL COMMISSION ON ENERGY POLICY

Therese Langer 

American Council for an Energy-Efficient Economy 

February 11, 2004 
ENERGY SAVINGS THROUGH INCREASED FUEL ECONOMY FOR HEAVYDUTY TRUCKS 

Summary

Seven percent of energy consumed in the U.S., and 30% of consumption in the 

transportation sector, is for the movement of freight. While trucks move less than half of 

all freight ton-miles, they are the preferred mode for short-to-medium distance, timesensitive goods. Trucks move the bulk of all freight value, and their share is increasing. 

Trucking is energy-intensive and accounts for 60% of freight energy use, consuming 2.3 

million barrels of oil per day in 2000. Hence trucks are an important place to look for 

energy savings in the transportation sector. Opportunities to reduce trucks’ energy 

consumption include both technological improvements and advances in systems and 

logistics. This report considers only the potential for vehicle technologies to raise truck 

fuel economy. 

There are fewer than three million medium and heavy trucks (those over 10,000 pounds 

gross vehicle weight) on U.S. roads, and annual sales are about one percent of passenger 

vehicle sales. Sales of individual models number in the hundreds or thousands, in contrast 

to the tens or hundreds of thousands for car models. Truck production is also more 

modular; engines typically are manufactured by diesel engine companies, then integrated 

into a vehicle meeting the specifications of the customer and, in many cases, matched 

with a trailer. Trucks must meet federal pollution emission standards, but they are not 

subject to fuel economy requirements. Like passenger vehicles, heavy trucks are 

produced by a handful of companies in the U.S., Europe and Asia. 

While truck users are more affected than passenger vehicle users by fuel expenses, the 

demand for fuel economy is not sufficient to bring all cost-effective efficiency 

technologies into the market. Manufacturer risk, low fuel prices, lack of fuel economy 

information on individual models, and undervaluation of fuel economy all limit the 

introduction of better technologies. 

This report estimates the energy savings that could be achieved through cost-effective 

technology improvements to heavy-duty trucks in the near future and explores candidate 

policies to realize these savings. The technologies considered are similar to those in 

DOE’s 21st Century Truck Roadmap, but that document contains no cost information. 

The savings and cost estimates in this report are based largely on two papers by Argonne 

National Laboratory researchers, one for technologies applicable to tractor-trailers and 

the other for hybrid technologies for short-haul trucks. The first of these papers has also 

been used extensively by the Energy Information Administration in forecasting heavyduty truck energy use in the U.S. 

Our methodology for estimating the total fuel economy gain achievable is modeled on the 

approach used by the National Academy of Sciences CAFÉ panel in its assessment of

cars and light trucks in 2001. Truck data throughout this report are derived from the 1997 

Vehicle Inventory and Use Study of the U.S. Census Bureau unless otherwise noted. 

1
Findings 

Tractor-trailers are the big fuel users among medium and heavy trucks, consuming twothirds of all truck fuel, or 1.5 million barrels per day. Substantial improvements could be 

made to their fuel economy through a variety of existing and emerging technologies, 

including engine improvements, transmission enhancements, and weight reduction: 

average fuel economy for new tractor-trailers could be raised by 29% starting in 2008 and 

by 58% in 2015, while providing net savings for the owner based on incremental cost and 

lifetime fuel savings. 

Introducing fuel economy standards for heavy-duty vehicles could help to realize these 

potential efficiency gains. Standards would present a technical challenge in that they 

would require a fuel economy test protocol for vehicles that vary widely in aerodynamics, 

load, and drive cycle. But tractor-trailers are more uniform in these regards than the rest

of the fleet, and meaningful standards for these trucks could be set. Alternatively, a 

standard for CO2 production for the engine alone could be combined with technology 

standards for vehicle components. 

For trucks other than tractor-trailers, hybrid technologies are promising, because a large 

fraction of miles driven by these trucks are local and under stop-and-go conditions.

Hybridization could almost double fuel economy for Class 3-5 trucks and raise Class 6-7 

fuel economy by 71% in city driving, at costs that will decline rapidly in the coming 

years. For over half of all trucks in classes 3-6 and straight trucks in Classes 7-8, 

hybridization could bring modest lifetime savings starting in the near future and savings 

of several thousand dollars for vehicles purchased in 2015 and beyond. Conventional fuel 

economy improvement technologies similar to those considered for tractor-trailers could 

be applicable to these vehicles as well, but, in combination with hybridization, they are 

far less likely to be cost-effective, because the savings per percent increase in fuel 

economy are lower when the base fuel economy is high. 

Because manufacturers will incur expenses in bringing hybrids to market, and because 

buyers do not purchase vehicles on the basis of net lifetime savings, the costeffectiveness of hybrids will not in itself translate into market success, and measures to

promote hybrids are needed until costs come down. Tax incentives like those proposed in 

the federal energy bill could contribute to this cost reduction; research and development 

sponsored by the U.S. Department of Energy could also help. 

Combining the cost-effective conventional improvements for tractor-trailers with 

hybridization of short-haul trucks would yield a 32% reduction overall in fuel 

consumption for new trucks by 2015. Such an improvement would take a decade to phase 

into the entire freight truck stock, by which time truck activity will have grown; but the

magnitude of potential savings is illustrated by noting that a 32% reduction in freight 

truck fuel consumption today would save 740,000 barrels of oil per day. 

2
Table S1 

Cost-Effective Fuel Savings from Heavy Truck Fuel Economy Improvements 

Available in 2015 

PICKUP TRUCKS,

SUVS, UTILITY 

VANS 

8500 – 10,000 LBS 

LOCALLY-DRIVEN 

TRUCKS 

10,000 LBS AND UP 

TRACTOR-TRAILERS 

33,000 LBS AND UP 

 

 

 

 

Potential improvement 

in fuel economy 33% 71 – 93% 58% 

Fuel Use Reduction as 

Fraction of Total Truck 

Fuel Use* 3% 7% 22%

Technology Conventional Hybrid Conventional

Recommended Policies Expand CAFE to 

include these vehicles Tax Incentives, R&D 

Fuel Economy Standards 

Options: by Vehicle or by

Individual Components 

(engine, body, etc) 

Trucks in the 8500-10,000 pound weight range are not considered heavy-duty, nor do 

they fall under existing passenger vehicle fuel economy regulations. This class, which 

includes both commercial and personal vehicles, largely pickup trucks, consumes 

360,000 barrels of oil daily. While efforts to include these vehicles under fuel economy 

regulation have encountered resistance based on concerns about farmers and others who 

need work vehicles meeting certain performance requirements, substantial fuel savings 

could be achieved in this weight range with no loss of functionality. The findings of the 

National Academy of Sciences CAFÉ panel provide strong evidence that a fuel economy 

increase of 33% is feasible for 8500-10,000 lb. vehicles. Applied to today’s vehicles, this 

would translate into savings of 90,000 barrels per day. 

In summary, the fuel consumption of all trucks over 8500 lbs. could be reduced by nearly 

one-third, as shown in Table S1. 

3

 *

 In Table S1 only, “truck fuel use” refers to fuel consumed by all trucks over 8500 lbs. Elsewhere, such

phrases refer to trucks over 10,000 lbs. only. 
Introduction

Seven percent of energy consumed in the U.S., and 30% of consumption in the 

transportation sector, is for the movement of freight (Figure 1). While trucks move less 

than half of all freight ton-miles, they are the preferred mode for short-to-medium

distance, time-sensitive goods. Trucks move the bulk of all freight value, and their share 

is increasing. It is an energy-intensive mode and accounts for 60% of freight energy use, 

consuming 2.3 million barrels of oil per day in 2000 (Davis 2003). 

Figure 1 

U.S. Transportation Sector Energy Use in 2000

Passenger

65% Truck

18%

Air

2% Rail

2%

Water

5%

Pipeline

3%

Other

30%

Other

5%

Data source: Davis 2003

Hence trucks are an important place to look for energy savings in the transportation 

sector. Opportunities to reduce trucks’ energy consumption include both technological 

improvements and advances in systems and logistics. This report considers the potential 

to raise truck fuel economy through vehicle technologies only. 

There are fewer than three million medium and heavy trucks (those over 10,000 pounds 

gross vehicle weight) on U.S. roads, and annual sales are under one percent of passenger 

vehicle sales. Sales of individual models number in the hundreds or thousands, in contrast 

to the tens or hundreds of thousands for car models. Truck production is also more 

modular; engines typically are manufactured by diesel engine companies, then integrated 

into a vehicle meeting the specifications of the customer and, in many cases, matched 

with a trailer. Trucks must meet federal pollution emission standards, but they are not 

subject to fuel economy requirements. Like passenger vehicles, heavy trucks are 

produced by a handful of companies in the U.S., Europe and Asia. 

Trucks fall into eight classes by gross vehicle weight. Classes 1 and 2 (up to 10,000 lbs. 

gross vehicle weight) are made up of pickups, SUVs, panel trucks and a variety of 

passenger and small cargo vans. Class 2 is further divided into passenger vehicles and 

Class 2b trucks (8500-10,000 lbs.) the latter containing mostly “work” pickups (typically 

4
3/4-ton), though an increasing percentage of Class 2b consists of large SUVs and luxury 

pickups. Classes 3-5 (14,001-19,500 lbs.) include delivery vans, walk-ins, and some

specialized vehicles such as bucket trucks. Beverage trucks, rack trucks and school buses 

are examples of Class 6 vehicles (19,501-26,000 lbs.). Classes 7-8 (26,001 lbs. and over) 

are largely tractor-trailers, but also include refuse, cement and dump trucks. 

Fuel costs are an important consideration for the trucking industry, so truck owners 

probably value fuel savings more than automobile owners do. Yet the market for fuel 

economy improvements has serious failings for trucks as well, as discussed below, and 

cost-effective fuel economy technologies are not necessarily adopted as they become

available. Indeed, while fuel economy of the smaller freight trucks has increased slowly 

over the past 25 years, fuel economy of the energy-intensive tractor-trailer fleet was the 

same in 2001 as in 1980 (Figure 2). 

Figure 2 

Fuel Economy of Freight Trucks, 1980-2001 

4

4.5

5

5.5

6

6.5

7

7.5

8

1980 1985 1990 1995 2000

Miles per gallon

Single-U nit Truck s, > 4 tires

C om bination Trucks

Data source: Davis 2003

Methodology

There is general agreement on the categories of technologies that can contribute 

substantially to raising truck fuel economy, but estimates of the potential for increases

vary widely. DuLeep projected increases in freight truck fuel economy through improved 

vehicle technologies in 2015, finding an “expected” increase over 1990 levels of 23% and 

an “optimistic” increase of 33% (DuLeep 1997). A 1992 ACEEE paper found that a 

tractor-trailer fuel economy increase of 64% over current levels would be feasible (Sachs 

1992). DOE’s 21st Century Truck Program set as “technical targets” improvements in 

fuel efficiency of 60% for large trucks and 140% for medium trucks, based on 

“aggressive development and implementation of technologies currently being considered 

5
but not yet commercially viable” (DOE 2000). DOE provided no cost estimates for 

reaching these targets, however. 

The discussion and analysis below of the potential to increase truck fuel economy draw 

heavily from two papers by Argonne National Laboratory researchers, the findings of 

which are moderate in the context of the literature. One of these papers (Vyas 2002) is 

also the basis for the Energy Information Administration’s forecasts of heavy-duty truck 

energy use. The paper estimates fuel economy increases and costs associated with 

existing and emerging technologies for all truck classes; we use those estimates for some

truck classes. 

Vyas et al. also project market share for each technology in the year 2025 based on a 

combination of considerations, including the percentage of each truck class for which the 

estimated fuel economy gain is valid, the cost of the technology, the date of introduction, 

and the lag time for adoption. These are considerations best kept separate for purposes of 

the present analysis, so the market share numbers were not adopted for this report. 

Instead, we used the fuel economy estimates only for a relatively homogeneous truck 

population that could get the full benefit of the technologies listed, namely tractortrailers. We then adopted the costs and dates of introduction from the paper to conduct an 

analysis of what suite of technologies would be cost-effective for tractor-trailers, using an 

approach similar to one used in the NAS CAFÉ report on light duty vehicles (NRC 

2002). 

The second paper we relied upon (An 2000) evaluates benefits and costs of hybridization 

of heavy-duty trucks. This is the basis for much of our discussion of potential fuel 

economy gains for short-haul trucks, complementing the tractor-trailer analysis. To 

calculate cost-effectiveness, we used the average fuel economy percentage improvement 

found by An et al., together with data on average base fuel economy and annual miles 

traveled for non-tractor-trailer trucks driven locally. Annual miles are on average close to 

the figure cited by An et al (14,500 miles), but the base fuel economy we use is 

substantially higher. This leads to an underestimate of the per vehicle fuel savings. On the 

other hand, we apply the technology to a broader set of vehicles than seems to be 

contemplated in the paper, which may result in some overestimate of the effects. 

 

Throughout this discussion, facts appearing without citation are derived from 1997 

Vehicle Inventory and Use Survey data. Important shifts may have occurred since then, 

but this will remain the best data source for many facts about trucks until the data from 

the 2002 VIUS becomes available later this year. 

Tractor-trailers 

The heaviest trucks (Classes 7 and 8, i.e. greater than 26,000 lbs.) dominate truck energy 

use, accounting for 81% of the total (Figure 3). These trucks are therefore particularly 

important to attempts to identify practical ways to improve fuel economy. As discussed 

above, Vyas et al. provide a list of technologies that could increase the fuel economy of 

Class 7 and 8 trucks, and the percentage gain and cost associated with each. The 

applicability of these efficiency technologies depends on truck type and duty cycle, 

6
however. In particular, trucks driven at low speeds will not benefit greatly from

aerodynamic treatments. Furthermore, the cost-effectiveness of the technologies is related 

to annual miles traveled, which tends to be low for trucks driven locally. 

We therefore analyze the benefits of the technologies only for tractor-trailers, which 

typically are driven long distances at highway speeds. Since most Class 7 and 8 trucks are 

tractor-trailers (and in fact tractor-trailers are responsible for 69% of energy consumed by 

all Class 3-8 trucks (Figure 1)), this simplifying step does not forfeit much of the 

potential benefit due to these technologies. 

Class 7and 8 vehicles that are not tractor-trailers are a diverse group and are discussed 

further in the section on short-haul trucks below. 

Figure 3 

Energy Use by Truck Type 

Class 3

3%

Class 4

1%

Class 5

1%

Class 6

14% Class 7&8

81%

Tractor-trailer 

69%

Straight truck

12%

Data source: Davis 2003

Technologies to increase fuel economy 

Technologies to raise fuel economy considered in the Vyas analysis include engine, 

aerodynamics and transmission improvements, as well as mass reduction, as shown in 

Table 1. Noteworthy technologies listed there include: 

• Electric and fuel-cell auxiliaries – Compressors, pumps and fans now run off the 

engine could be operated electrically, through an integrated starter-generator, or by 

fuel cell. A fuel cell could also operate auxiliary systems at rest stops, reducing idling 

time, but no credit for this is taken below. 

• Thermal management, etc. – This encompasses reduction of waste heat through 

increasing the efficiency of turbocharging, for example. 

• Pneumatic blowing – Aerodynamics can be improved by blowing air through points 

on the vehicle exterior, a technique already applied to aircraft. 

7
The estimates of fuel economy benefits are in some cases probably conservative; 

electrical or fuel cell auxiliaries, for example, could be expected to bring higher savings 

than shown. Other technologies considered may be speculative (e.g. pneumatic blowing). 

On the other hand, the list omits technology options as well, and it is appropriate that 

some technologies still under development be included, so as not to underestimate too 

greatly the potential for fuel economy improvement in the time frame considered here. 

Table 1 

Fuel Economy Technologies for Class 7 and 8 Trucks 

fuel economy

gain 

year of 

introduction 

cost

Aerodynamics

 cab top deflector 2.0% current $750 

 gap closing 2.5% 2005 $1,500 

 trailer edge curvature 1.3% 2005 $500 

 pneumatic blowing 5.0% 2010 $2,500 

rolling resistance 

 low RR tires 3.0% 2005 $1,098 

 super singles 3.0% 2008 $1,098 

 pneumatic blowing 1.2% 2015 $500 

Transmission 2.0% 2005 $1,000

Auxiliaries

 electrical auxiliaries 1.5% 2005 $500 

 fuel-cell auxiliaries 6.0% 2012 $1,500 

Engine

 friction reduction 2.0% 2005 $500 

 increased peak cylinder pressure 4.0% 2006 $1,000 

 improved injectors etc 6.0% 2007 $1,500 

 thermal management, etc. 10.0% 2010 $2,000 

vehicle mass 5.0% 2005 $2,000 

Source: Vyas 2002 

Cost-effectiveness of technology packages

As mentioned above, the approach to determining the cost-effective level of fuel 

economy follows the light-duty analysis in NAS CAFÉ study. Using average values for 

annual miles traveled and fuel economy, and various fuel prices and investment payback 

requirements, we added technologies in declining order of cost-effectiveness until the 

marginal economic benefit turned negative. This approach is best suited to determining a 

feasible level for fuel economy standards; it does not predict the behavior of purchasers, 

even in a perfect market, because it uses average values of important parameters. 

Table 2 shows the results under eight different sets of assumptions involving fuel price, 

discount rate associated with fuel savings, payback period to recover higher capital costs, 

and deadline for technology introduction. The two diesel fuel prices were $1.41, the 

average price over the period 2000-2025 according to projections in EIA’s Annual 

8
Energy Outlook 2003, and $1.60, which adds a 19 cent-per-gallon externality cost. The 

two payback requirement options were: 1) a fuel savings discount rate of 12% over an 

average vehicle life of 14 years, and 2) a discount rate of 8% over 3 years. The two 

technology horizons were 2008 and 2015. 

Table 2

Cost and Savings of Increased Tractor-Trailer Fuel Economy: Eight Scenarios 

Baseline fuel economy is 6.2 miles per gallon

Payback/ discount rate Diesel price 

per gallon 

Fuel 

economy

improvement

New miles 

per gallon 

Cost Fuel savings Net savings

Technologies introduced in 2008 or earlier 

14 years/12% $1.41 29% 8.0 $9250 $21,381 $12,131

3 years/8% $1.41 18% 7.3 $4750 $7216 $2466

14 years/12% $1.60 29% 8.0 $9250 $24,262 $15,012

3 years/8% $1.60 24% 7.7 $6750 $10,363 $3613

Technologies introduced in 2015 or earlier 

14 years/12% $1.41 58% 9.8 $15,250 $34,576 $19,326

3 years/8% $1.41 31% 8.1 $6750 $10,791 $4041

14 years/12% $1.60 58% 9.8 $15,250 $39,236 $23,986

3 years/8% $1.60 35% 8.4 $8000 $18,588 $10,588

The 14-year payback option was used in the NAS CAFÉ study on light-duty vehicles and 

is meant to maximize total user benefit, while the 3-year option is meant to reflect the 

payback requirements of a typical truck purchaser in deciding whether to invest in higher 

fuel economy when buying a new vehicle. This does not imply that the fuel economy 

improvements corresponding to the 3-year options would actually materialize in the 

current market, however. Lack of fuel economy information on vehicles at the time of 

sale, the manufacturers’ risks in investing in new technology, the possibility that 

manufacturers could apply the same technologies to performance improvements more 

marketable than fuel economy, and the variety in tractor-trailer duty-cycles all can serve 

to make fuel economy fall short, in a business-as-usual scenario, of the level predicted by 

the 3-year payback analysis. 

To summarize the result of the cost-effectiveness analysis: Using technologies available 

before 2008 and allowing a 14-year payback, the cost-effective fuel economy is 8 miles 

per gallon, 29% above the current average. Adding technologies available by 2015, the 

cost-effective fuel economy rises to 9.8 mpg, a 58% increase over current levels. Average 

lifetime savings per truck are considerable: incremental vehicle costs of $15,000 and 

(discounted) fuel savings of $35,000 give a net savings of $20,000. 

 

Policies to increase tractor-trailer fuel economy

The fact that the gap between highest cost-effective heavy truck fuel economy and 

existing levels is large raises the question of what policies could reduce that gap. 

Increasing the price of fuel by the per-gallon externality cost is one candidate. For the 

particular set of technologies used in the above analysis, an increase of 19 cents per 

gallon produces little change in the cost-effective level of fuel economy, as Table 2 

9
shows. A second policy option is a fuel economy standard for tractor-trailers. The results 

in Table 2 indicate that a standard of 9.8 mpg phased in by 2015 would be reasonable,1

with a baseline of 6.2 mpg for today’s fleet. 

There are at present no fuel economy standards for vehicles over 8500 lbs. in the US (or 

elsewhere, for that matter). One reason for this is the huge variety among trucks, both in 

how they are configured and in how they are used, even within a class. Tractor-trailers

are relatively homogeneous, however, making this the best category for which to consider 

fuel economy standards from the standpoint of feasibility, as well as fuel savings. In 

particular, because the vast majority of tractor-trailer miles are driven on the highway, the 

problem of choosing an appropriate test cycle is much simplified. Nonetheless, there is 

enough variation in performance requirements for these vehicles that a single fuel 

economy standard does pose a technical challenge. 

Given differences among trailer types, an engine bench test such as the one used for 

emissions testing has the advantage of simplicity. But aerodynamics and other engineindependent features play an enormous role in heavy truck fuel economy, which such a 

test cannot capture. Among the efficiency technologies listed in Table 1, engine 

technologies account for only 40% of all potential savings, so standards based on engine

performance alone could be expected to yield less than half of the achievable 

improvement in fuel economy. Combining individual technology requirements for nonengine components with a bench test could recover some of the remaining efficiency 

opportunities, but could not be expected to match the results of a vehicle fuel economy 

standard. 

The absence of a fuel economy testing and labeling requirement for heavy trucks creates 

a failure in the current market, in that truck buyers lack the information to choose the 

most efficient truck. Therefore, one step toward establishment of a fuel economy standard 

that would have value in itself would be the creation of a testing and labeling program for 

these vehicles. 

Short-Haul Trucks

Trucks that are not tractor-trailers have quite diverse duty cycles, and they are used to a 

far greater extent for local trips. Indeed, 53% of all miles driven by trucks other than 

tractor-trailers are driven by trucks that operate primarily locally, i.e. on trips of under 50 

miles. The technologies discussed above that provide efficiency gains for tractor-trailers 

can apply to these smaller trucks as well. Some of the technologies are much less 

effective for trucks that generally drive at low speeds, however, and therefore have 

limited applicability. On the other hand, these trucks are the best candidates for hybrid 

technology, because local trips typically involve a large amount of stop-and-go driving,

which permits extensive capture of braking and deceleration energy. Hybridization can 

offer a larger fuel efficiency gain than any other technology considered here. 

 1

 These standards in effect assume the availability of certainly technologies as of their date of introduction.

10
Hybrid vehicles

This section assesses the potential for hybrid technologies to provide cost-effective 

energy savings. Because hybridization improves efficiency of stop-and-go driving more 

than efficiency of highway driving, vehicles that operate largely on a city driving cycle 

would benefit most per mile. On the other hand, many urban vehicles travel 

comparatively few miles annually, which works against speedy recovery of incremental 

costs through fuel savings. The best candidates for hybridization are trucks driven many 

miles on local roads. 

The percentage savings that can be expected from hybridization is very sensitive to duty 

cycle. For this reason, analyses and efforts to promote hybrids often focus on narrow 

categories of vehicles. The Hybrid Truck Users’ Forum, for example, made a preliminary 

selection of four types as good candidates for hybridization: Class 4-8 Specialty Trucks, 

including utility and fire trucks; Class 4-6 urban delivery trucks, including package and 

beverage delivery; Class 7 and 8 refuse collection; and Class 7 and 8 less-than-load urban 

delivery trucks (WestStart 2002). 

Despite the specificity of hybrid gains to duty cycle, some quantitative statements about 

the fuel economy improvement and cost of hybridization can be made at a general level. 

Vyas et al., cited in the tractor-trailer discussion above, estimate the fuel economy 

advantage of a Class 4-6 hybrid-electric to be 40-70%, at a cost of $8000. The 21st

Century Truck Roadmap sets a fuel economy goal of three times current levels for 

Classes 2b and 6, of which a large percent is to come from hybridization; but it does not 

discuss costs. 

As noted above, the analysis here uses estimates of fuel economy improvements and 

costs associated with hybridization from An 2000. The results of that paper are based on 

modeling of a Class 3-4 delivery truck and a Class 6-7 truck or bus, and evaluating the 

effects of hybridization over five urban duty cycles. The average fuel economy increase 

over the five cycles is 93% for the Class 3-4 truck and 71% for the Class 6-7 vehicle. The 

incremental cost of the hybrid vehicles depends on the choice of technology and the year, 

the later being a surrogate for progress towards economies of scale and experience with 

the technology. The decline in cost over time also reflects expected increases in battery 

life. For purposes of this discussion, we use the least expensive option, namely a parallel 

hybrid with a lead-acid battery, for which the cost estimates are shown in Table 3.2

Table 3 

Estimated Incremental Costs of Parallel Hybrid-Electric Trucks 

2005 2010 2015 2020

Class 3-5 $5,760 $4,472 $3,553 $3,013 

Class 6-7 $7,149 $5,371 $4,090 $3,346 

Source: An 2000 

 2

 Given that heavy-duty hybrid trucks are not commercially available in 2004, references to the year 2005

in this section should be read as “near-term”. 

11
Work on hydraulic hybrids has yielded similar results. EPA is experimenting with a Class 

6 hydraulic hybrid that achieves a fuel economy increase in the vicinity of the hybridelectric gain cited here and, given “high manufacturing volumes,” at similar costs. 

 

Returning to the hybrid-electric case, our conclusions are as follows (Table 4): for 

purchases at the 2005 cost and under the 14-year-life/12% discount rate scenario, hybrids 

in Classes 3-5 would bring net cost savings over the life of the vehicle. These savings are 

$1583 if fuel costs $1.41 per gallon and $2572 at $1.60 per gallon. Using 2015 costs 

roughly doubles net savings. In the 3-year payback/8% discount rate scenario, hybrids are 

only cost-effective starting in 2015 (when incremental costs of production will have 

dropped) and at fuel prices of $1.60. Results for Class 6 trucks are similar, and we 

assume the same for the larger trucks.

Table 4 

Cost-Effectiveness of Hybrid-Electric Trucks 

Base mpg Fuel economy

gain 

Class 3-5 9.2 93%

Class 6 7.4 71%

Fuel savings 

Class 3-5 At $1.41 per 

gallon 

At $1.60 per 

gallon 

Class 6 At $1.41 per 

gallon 

At $1.60 per 

gallon 

In 14 years, 12% discount rate $7,343 $8,332 In 14 years, 12% discount rate $8,578 $9,733 

In 3 years, 8% discount rate $3,242 $3,679 In 3 years, 8% discount rate $3,772 $4,280 

Net savings at 2005 purchase cost 

Class 3-5 At $1.41 per 

gallon 

At $1.60 per 

gallon 

Class 6 At $1.41 per 

gallon 

At $1.60 per 

gallon 

In 14 years, 12% discount rate $1,583 $2,572 In 14 years, 12% discount rate $1,429 $2,584 

In 3 years, 8% discount rate -$2,518 -$2,081 In 3 years, 8% discount rate -$3,377 -$2,869 

Net savings at 2015 purchase cost 

Class 3-5 At $1.41 per 

gallon 

At $1.60 per 

gallon 

Class 6 At $1.41 per 

gallon 

At $1.60 per 

gallon 

In 14 years, 12% discount rate $3,790 $4,779 In 14 years, 12% discount rate $4,488 $5,643 

In 3 years, 8% discount rate -$311 $126 In 3 years, 8% discount rate -$318 $190 

Policies to promote hybrids 

The 2003 energy bill conference report contains tax credits for purchasers of hybrids, 

including heavy-duty vehicles. The credit is a percentage of the incremental cost relative 

to a comparable conventional vehicle, where that percentage is determined by the 

hybrid’s city fuel economy advantage, as shown in Table 5. There is a cap on incremental 

cost, which depends on vehicle weight. 

These credits would be available as of the date of enactment of the bill and last through

2008. Each manufacturer is subject to a cap on the number of vehicles of all types that 

receive credits in this section of the bill, which include light duty hybrids and diesels.

12
Consequently some manufacturers, notably those that are far along in their development 

of light-duty hybrids, may not be motivated to seek heavy-duty hybrid credits. On the 

other hand, the per-vehicle credits are potentially higher for heavy-duty vehicles, so 

manufacturers that are in a position to offer heavy-duty hybrids will do so. 

Table 5

Energy Bill Tax Incentives for Heavy-Duty Hybrids 

Improvement in city 

fuel economy 

30-40% 40-50% >50%

 % incremental cost 

covered by tax credit 

20% 30% 40%

Vehicle weight Maximum incremental cost 

<14,000 lbs. (Class 2b-3) $7,500 

14,000-26,000 lbs. (Class 4-6) $15,000 

>26,000 lbs. (Class 7&8) $30,000 

Source: Energy Policy Act of 2003 (H.R.6) Conference Report

 

The hybrid vehicles considered in the preceding section would be eligible for credits of

40% of incremental cost. The incremental costs projected in An et al. are below the 

maximum allowed in the energy bill. A comparison of Tables 3 and 5 indicates a lack of 

consensus on incremental costs, and in particular on its relationship to vehicle size. 

Table 4 shows that, while hybrids in all classes considered are cost-effective based on a 

14-year payback and 12% discount rate, they are not cost-effective in the immediate 

future for those demanding a 3-year payback and discounting at 8%. The proposed tax 

credits could change that picture: at a fuel price of $1.60 per gallon, the credits together 

with three years’ fuel savings would fully offset incremental costs for Class 3-5 hybrids, 

and would be almost sufficient for Classes 6&7 as well. 

Thus the credits seem to be of about the right size to do what they are designed to do, 

namely to accelerate the viability of hybrids in the vehicle market by providing a 

temporary subsidy to the consumer.3

 The incentives could also bring about the decline of 

hybrid costs with time predicted by An et al. Conversely, without the credits or some

other incentive, the technology may not materialize at all; the decline of technology costs 

with time assumed in the study is premised on the growth in experience and economies of 

scale that would follow from near-term introduction of these vehicles, which the market 

alone will not bring about. 

Funding for hybrid research and development is also a determinant of the rate at which 

hybrids enter the market. It is not clear that DOE continues to be committed to the 

3

 The exact credits in the energy bill, in view of their very short lifetime, are not likely to produce such

favorable results as discussed here. 

13
efficiency improvement goals set out in the 21st Century Truck Roadmap, and the FY 

2005 budget request for the 21st Century Truck Partnership is 30% below the 2004 

appropriation level. 

 

Non-hybrid technologies 

A suite of technologies similar to those discussed above for tractor-trailers could also 

provide substantial fuel economy benefits for Class 3-6 trucks. In most cases, these 

would not be applied with hybridization because they are better suited to a highway duty 

cycle, or because technologies’ cost-effectiveness drops dramatically when they are 

combined with hybridization (since the “base” fuel economy for a hybrid is so high). 

For the 37% of Class 3-6 vehicles that are not used locally and therefore may not be good 

candidates for hybridization, some of conventional efficiency technologies would be 

cost-effective. These improvements are not included in our final estimates of potential 

savings, however. Fuel economy standards for such a diverse group of vehicles would be 

unwieldy, and no candidate policy is offered here to produce these savings. 

Class 2b trucks

Class 2b trucks (8500-10000 lbs. GVW) consume 360,000 barrels of oil annually (Davis 

2003), more than any class of medium or heavy truck other than Class 8. A brief 

discussion of these vehicles is included here because, like the larger trucks, they are 

subject to no fuel economy standards and are therefore typically excluded from

discussions of passenger vehicle efficiency improvements. 

Fuel economy standards, feebates, and incentives to promote hybridization all warrant 

consideration for Class 2b. This class includes a wide range of vehicle types, but 80% are 

pickups (Davis and Truett 2002), which together with vans, panel trucks and sport utility 

vehicles make up over 96% of the total. These vehicles have under-8500-lb. counterparts, 

and bringing them under CAFÉ or a feebate scheme would pose no serious technical 

obstacles. 

Indeed, an increase in the weight limit for vehicles subject to CAFÉ, from 8500 lbs. to 

10,000 lbs., has been proposed in recent bills considered by Congress, and DOT has 

raised this possibility for consideration in its next CAFÉ rulemaking (DOT 2003). One 

concern voiced repeatedly has been that fuel economy regulation of Class 2b would be a 

hardship for farmers and others that need a vehicle in this weight range for work. These 

vehicle owners would benefit at least as much as others by improvements in fuel 

economy, however, so long as they preserve vehicle functionality. It is nonetheless 

possible that some will propose to address this issue by creating an exception for work 

trucks. 

Over half of all vehicles in this weight range are used primarily as personal vehicles, but 

it is difficult to set vehicle standards on the basis of use, rather than vehicle 

characteristics. EPA’s Tier 2 tailpipe regulations approach this problem by defining work 

vehicles as those that have either a very large seating capacity or a bed of length six feet 

14
15

or more.4 The emissions rules for heavy-duty vehicles apply to these work vehicles; the 

remaining vehicles in Class 2b must meet the same standards as light-duty vehicles meet 

under Tier 2. All pickups and many vans in this weight class will qualify as work 

vehicles under this definition, leaving large SUVs as the primary Class 2b vehicles 

brought into the light-duty emissions regime under Tier 2. As noted above, the vast 

majority of Class 2b vehicles are pick-ups, so this approach would subject only a 

minority of new vehicles to fuel economy standards. For those that would be subject, 

though, choosing a test cycle would be relatively straightforward, since these vehicles 

will already undergo chassis dynamometer testing for Tier 2 compliance purposes in the 

near future. 

Basing fuel economy standards on vehicle attributes such as size, as the Department of 

Transportation is now considering for light-duty vehicles, could lessen opposition to 

placing work vehicles under CAFE. At the same time, this approach is likely to yield 

lower fuel savings than bringing Class 2b vehicles into the present fuel economy regime. 

A one-third increase in fuel economy for pickups, SUVs and vans would be feasible. The 

NAS CAFÉ panel found this level of improvement to be cost-effective for light trucks, 

and Class 2b trucks are by and large quite similar to their below-8500-lb. counterparts. 

The NAS concluded that these largest of light-duty vehicles have a higher potential for 

fuel economy increase than do light trucks on the whole. The 33% improvement estimate 

for 2bs is in this sense conservative. 

Total fuel savings from higher truck fuel economy

Here we estimate fuel savings from all the fuel economy improvements found above to 

be cost-effective. The efficiency improvement estimates given for tractor-trailers are 

assumed to apply to all tractor-trailers, even though they are valid only for highway 

vehicles. A non-negligible fraction of tractor-trailers are driven locally, but they tend to 

be older trucks. The fact that tractor-trailers travel a smaller percentage of their miles on 

highways as they age may mean that cost savings of certain technologies are slightly 

overstated here. Given the high discount rate applied to fuel savings and decline with age 

of miles traveled, however, this effect is small. For the small percentage of tractor-trailers 

that are used locally for their entire lives, the analysis is not valid. Life-long local tractortrailers are candidates for hybridization (although we do not include them in the hybrid 

discussion), however, which would bring even higher efficiency benefits. 

For vehicles other than tractor-trailers, the aggregate potential benefit of hybridization is 

associated with those that travel primarily locally. In Classes 3-6, local vehicles are 

responsible for 47% of miles traveled. Among Class 7-8 vehicles that are not tractortrailers, 56% of miles are traveled by trucks that operate locally. 

 

4

 The definition of “medium duty passenger vehicle” MDPV excludes “any vehicle that (1)has a capacity of 

more than 12 persons total or (2) that is designed to accommodate more than 9 persons in seating rearward 

of the driver’s seat or (3) has a cargo box (e.g., a pick-up box or bed) or six feet or more in interior 

length).” Fed Reg Vol. 65, No.28, p.6750. 
16

Table 6 summarizes the fuel savings that would be achieved if each cost-effective fuel 

economy technology discussed above were to be adopted by the set of vehicles to which 

it applies. Because the fuel use of trucks is dominated by the tractor-trailers, this is the 

most important source of fuel savings: a 58% increase in fuel economy increase for 

tractor-trailers reduces total Class 3-8 fuel consumption by 24%. Hybridization of locally 

driven trucks in Classes 3-6 and straight trucks in classes 7 and 8 adds another 8%, for a 

total reduction of 32%. 

This represents the potential reduction in new truck fuel consumption beginning in 2015. 

DOE’s NEMS model, for example, can be used to project the rate of improvement for the 

entire truck stock resulting from this level of efficiency improvement in new vehicles. 

But to place these gains in the context of all highway vehicle fuel use, note that if the 

Class 3-8 truck stock used 32% less oil today, savings would be 740,000 barrels of oil per 

day. In addition, if the fuel economy of Class 2b trucks were one-third higher today, their 

fuel consumption would be 90,000 barrels per day lower. 

Table 6 

Cost-Effective Fuel Savings from Heavy Truck Fuel Economy Improvements 

Available in 2015 

Class 2b 

8500-10,000 lbs. 

Class 3-5 

10,001-19,500 

lbs. 

Class 6 

19,501-26,000 lbs.

Class 7-8 

26,001 lbs. and 

up 

Class 7-8 

26,001 lbs. and 

up 

Technologies Assorted 

conventional Hybrid Hybrid Assorted 

conventional Hybrid 

Policies Fuel economy 

standard, feebate 

Tax incentives 

and R&D for 

hybrids 

" 

Fuel economy 

and technology 

standards 

Tax incentives and R&D for hybrids

Applicability Pickup, van, SUV Local Local tractor trailer Straight, local 

Potential costeffective 

improvement in 

fuel economy 

33% 93% 71% 58% 71% 

Miles traveled by 

vehicles to which 

technology applies 

(as % of total class 

miles) 

96% 53% 44% 85% 9% 

Oil use of class (as 

% of all Class 3-8 

oil use) 

16% 5% 14% 81% 81% 

Total reduction 

of Class 3-8 oil 

use 

Reduction in oil 

use as % of all 

Class 3-8 truck oil 

use 

4% 1% 3% 25% 3% 

32% 

(36% w/ Class 2b 

savings) 

This discussion summarizes the benefits of all technological improvement found above to 

be cost-effective. What level of adoption of those technologies the proposed policies 

would achieve is another question. Fuel economy standards for tractor-trailers and Class 
17

2b trucks would yield a high percentage of the reductions discussed above, though the 

issue of rebound needs to be considered. In the case of tax credits and R&D funding to 

accelerate hybridization of the remaining trucks, further analysis needs to be done to 

determine the extent of incentives and how much investment needed to bring hybrid costs 

down to levels associated with high volumes. 
18

 

References

(An 2000) An, Stodolsky, Vyas, Cuenca and Eberhardt, “Scenario Analysis of Hybrid 

Class 3-7 Heavy Vehicles,” Society of Automotive Engineers, March. 

(Davis 2003) Davis and Diegel, Transportation Energy Data Book Edition 23, Center for 

Transportation Analysis, Oak Ridge National Laboratory, October. 

 

(Davis and Truett 2002) Davis and Truett, “Investigation of Class 2b Trucks,” 

ORNL/TM-2002/49, Oak Ridge National Laboratory, March. 

(DOE 2000) “Technology Roadmap for the 21st Century Truck Program,” 21CT-001, 

December. 

(DOT 2003) National Highway Traffic Safety Administration Advanced Notice of 

Proposed Rulemaking, “Reforming the Automobile Fuel Economy Standards Program,” 

49 CFR Part 533, USDOT, December. 

(DuLeep 1997) DuLeep, “Keep On Truckin’ – Sustainably?” in Transportation, Energy, 

and Environment: How Far Can Technology Take Us? ed. DeCicco and DeLucchi, 

American Council for an Energy-Efficient Economy. 

 

(NRC 2002) National Research Council, “Effectiveness and Impact of Corporate 

Average Fuel Economy Standards,” Transportation Research Board. 

(WestStart 2002) Hybrid Truck Users’ Forum, “Hybrid DiaLog” 

http://www.weststart.org/programs/htuf/hybriddialog/Htuf-info-02-07.pdf, November. 

(Sachs 1992) Sachs, DeCicco, Ledbetter, Mengelberg, “Heavy Truck Fuel Economy: A 

Review of Technologies and the Potential for Improvement,” American Council for an 

Energy-Efficient Economy, January. 

(Vyas 2002) Vyas, Saricks and Stodolsky, The Potential Effect of Future EnergyEfficiency and Emissions-Improving Technologies on Fuel Consumption of Heavy 

Trucks, Argonne National Lab, August.